What You Need to Know About Net Neutrality

I think it’s a fact that most Americans haven’t got a clue what the Net Neutrality issues are. As a StudioDaily reader, you will need to know them, both now and in the future.

Traditionally the halt of honest information flow comes from totalitarian governments like we see in China. But here in America today, the threat comes from major communications and media corporations who wish to gain power by controlling the flow of all information both in the media and on the web. They are arranging to control media from source to delivery, kind of a linear monopoly. As you may know, I’ve been disgusted by the incompetent management at NBC Universal. Now Comcast had taken over NBC, thus gaining control over a major network along with their control of cable distribution and the US’s largest Internet service area. This is just the beginning. The major media companies and the major information distribution channels are hooking up. They’re talking about consolidation of power and the FCC seems to think it’s in the public interest. Okay, the FCC seems to talk out both sides of its mouth. It frequently says and does things in favor of network neutrality. But there is even an issue about whether the FCC has any authority over the Internet. One Federal Court found that it did not.

So what really is Net Neutrality? Watch this YouTube video from the folks at Freepress and you’ll see what we’re talking about here, perhaps the end of one of the Internet as we know it:

First, an update.

One good thing has come out of the Comcast/NBCU merger. The first thing Comcast did was bring on Steve Burke as the new CEO of NBCU. He immediately fired NBCU’s incredibly incompetent CEO, Jeff Zucker in mid September. Immediately the programming lineup on NBC started to improve. Burke has been able to lure some big names like David E. Kelley back. Burke is a loyal Comcast guy who’s been with them since 1998 as President of Comcast Cable. He pioneered OnDemand television, and he has also served as president of ABC Broadcasting, and COO of EuroDisney. Clearly the man has some eye for entertainment. So we’re likely to see better programming showing up on NBC. But none of this helps us with the network neutrality issue that this merger brings to the fore. Burke is staunchly against Net Neutrality.

I contacted Senator Al Franken, a smart guy who is also a valiant fighter for Net Neutrality. He said:

“Right now our free speech rights are under assault — not from the government but from corporations seeking to control the flow of information in America. If that scares you as much as it scares me, then you need to care about net neutrality.”

Franken is spearheading an effort in Congress to raise awareness of the deeper implications and dangers involved in recent FCC decisions, and the corporate thrust to gain complete control of the flow of information in America.

Senator Maria Cantwell from Democrat from Washington State told me, “Without net neutrality, I am concerned that broadband Internet service providers have the economic incentive and the technical means for favoring their own or affiliated content, applications, and services at the expense of their competitors.” When I asked her about the FCC involvement, she said, “While I agree the FCC has the authority to issue its own rules, the Commission’s December proposal does not do enough to protect consumers and ensure the Internet remains a force for innovation and economic growth. That’s why I introduced net neutrality legislation that protects consumers and businesses, supports innovation and investment, and will preserve the free and open Internet.”

I’m glad we have Maria on our side.

Our Problem with Information Pipeline Mergers

The latest FCC approval of the massive merger of Comcast and NBC Universal (NBCU) is a crime against the American people in my opinion. The FCC officially has found that this merger is in the public interest. It clearly is not. The way they justified their decision was to require Comcast/NBCU to add a few extra channels and maybe some public interest channels. And they told the new conglomerate not to mess with HULU. Meanwhile, they’re creating a massive pipeline monopoly that goes from content creation to delivery. That monopoly now includes the US’s largest ISP (Internet Service Provider).

Since the Internet is daily becoming more integrated into our lives and TV and Internet are becoming joined at the hip, we need to be concerned about keeping the Internet open and neutral. That’s kind of difficult when Comcast, the largest provider of Internet, and a known throttler, wants to convert the open Internet into a private enterprise. As I understand it, they want to see to it that their competition, like Netflix, has to pay extra large fees to access the citizens serviced by Comcast Internet. This brings the neutrality issue close to home.

I had a chat with my articulate friend and media expert John Tarnoff. He’s Head of Industry Relations for the Master of Entertainment Industry Management (MEIM) Program at Carnegie Mellon’s Heinz College in Hollywood. John has been at the center of media/entertainment business for 30 years. His broad management experience as studio executive, film and interactive producer, and technology entrepreneur really qualify him to have an opinion here. Here’s what he told me:

“Net Neutrality is today’s single most important policy issue for young, emerging content creators. The Net Neutrality debate is all about opening the flat and wide Internet to content produced and distributed directly to consumers vs. preserving the traditional content distribution gates (and gate keepers!) who seek to meter access to content, maintain the illusion of scarcity, and preserve a neolithic pricing structure that is necessary only to support outdated and irrelevant corporate infrastructures. Honestly I think this is the best statement of the problem I’ve seen to date.

Picture it this way: Right now the on ramp of the Internet is reasonably wide open. A media company or website pays for so much bandwidth to put their media on line. Everybody pays the same for a given bandwidth. The ISP can’t charge one company a higher rate for the same bandwidth because they plan to upload competing media. That keeps a level playing field. I pay a few dollars a month for my website and people can access my site from anywhere at a very high bandwidth.

On the other end of the pipeline, we ordinary people pay for download bandwidth. It’s usually asymmetrical, meaning the download speed is faster than the upload speed. I have a 7 Mbs down and I think 2MBs up. The connection costs me about $60/month. That’s expensive by today’s standards, but I live in a rural area. It costs more to deliver service here. I like being able to watch video real-time, TV etc.

This is pretty much as it should be. Competition keeps rates reasonable and everybody’s happy. Big profits are being made in spite of massive infrastructure development costs. What the Megamedia companies want to do is tilt the playing field to their advantage. Since they have an ax to grind…they want to sell media services such as TV, PPV, Interactive games, etc. They don’t want to let competing smaller media companies and websites have access to what they consider their audience. So they developed throttling, the practice of slowing down data flow from specific users.

Thus they want to become the gate keepers to keep out the competition. The FCC has put out a press release trying to explain their reasoning. Here’s a partial quote from the FCC release:

Protecting the Development of Online Competition

• Does not exercise corporate control over or unreasonably withhold programming from Hulu.

In addition, they’ve added a few public access TV channels…etc.

It all sounds good, but. . .This all sounds like the FCC is trying to protect the little guy. But very few of these provisions cover the Internet, and those that do will soon come under legal attack. Comcast has been, and will continue to bring its massive financial and legal resources to bear in its efforts to wiggle out of FCC constraints. The situation is an army of fancy lawyers against a few government officials and lawyers. They’ve already won at least one major battle against the FCC’s rulings in Federal Court…more to come. With the very conservative Supreme court we have now I don’t think the FCC has much chance. It appears that most conservatives including the Tea Party are vociferously against net neutrality. Can the top court be far behind?

What happens when smaller media companies try to protect themselves in court? Same thing — massive onslaught of corporate lawyers will bury them in paper to start. They are masters of delay. I expect some of these agreements to be violated right away. The lawyers will argue that it’s all a matter of interpretation. The FCC seems to have left the doors WIDE open to interpretation with their ruling. It’s interesting that they name Hulu but not Netflix as the most threatened by this merger. Netflix distributes material in direct competition with Comcast and NBC.

Worse yet, Comcast has long been reported to use deep packet inspection to snoop on the content of stuff being sent over the Internet through their servers. Peter Svensson of the Associated Press published an article way back in 2007 clearly stating that Comcast has been interfering with the flow of files between their Internet subscribers on P2P networks. He called them the most drastic of data discriminators, especially against P2P networks. In 2009 Comcast had to pay $16 million in a settlement for blocking P2P content.

These billionaire companies have also been lobbying Congress mightily for some time now. They’ve reportedly spent in the hundreds of millions at it. They have armies of lobbyists with massive budgets out there influencing a lot of Senators and Representatives in their favor. How is that even legal? And how is it in the Public Interest? It’s not.

The US courts seem divided on whether or not the FCC has jurisdiction over the Internet. There is some question over whether the Internet is a form of telecommunication. It’s all very confusing.

Storm Clouds Gathering

Damn, before I even get to press with this post ATT and T-Mobile are talking about a merger. ATT is one of the strongest anti-net neutrality advocates in the country.

What You Can Do

Fortunately, there are a few honest and dedicated members of Congress who are both aware of this problem and are working to prevent corporate takeover of the Internet. They are also working to clarify the issues involved. The most active right now seems to be Senator Al Franken, with Sen. Bernie Sanders (D-Vt.), Sen. Maria Cantwell  (D-Wash.), Rep. Maurice Hinchey (D-N.Y.) also in the fray. The site www.freepress.net , which brought you the video above, also has an informative campaign going.

One way to help the situation is to contribute whatever you can to the war chests of these noble Congress People. Also I suggest following the situation on Freepress.